Thank you for standing by. Welcome to the Remitly Second Quarter 2024 Earnings Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today Stephen Shulstein, Vice President of Investor Relations. Please go ahead.

Thank you. Good afternoon and thank you for joining us for Remitly's second quarter 2024 earnings call. Joining me on the call today are Matt Oppenheimer, Co-Founder and Chief Executive Officer of Remitly; and Hemanth Munipalli, our Chief Financial Officer. Our results and additional management commentary are available in our earnings release, and presentation slides, which can be found at ir.remitly.com. Please note that this call will be simultaneously webcast on the Investor Relations website. Before we start, I would like to remind you that we'll be making forward-looking statements within the meaning of the Federal Securities laws, including but not limited to statements regarding Remitly's future financial results and management's expectations and plans. These statements are neither promises nor guarantees and involve risks and uncertainties that may cause actual results to vary materially from those presented here. You should not place undue reliance on any forward-looking statements. Please refer to our earnings release and SEC filings for more information regarding the risk factors that may affect our results. Any forward-looking statements made on this conference call, including responses to your questions, are based on current expectations as of today, and Remitly assumes no obligation to update or revise them, whether as a result of new developments or otherwise, except as required by law. The following presentation contains non-GAAP financial measures. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP metric, please see our earnings press release, and the appendix to our earnings presentation, which are available on the IR section of our website. Now, I will turn the call over to Matt to begin.

Thank you, Stephen, and thank you all for joining us to discuss Remitly's long-term strategic priorities, strong second quarter results, and our increased outlook for 2024. We continue our journey to transform lives with trusted financial services that transcend borders. We are doing this by reinventing international payments for our customers in a way that has not been done before, making the cross-border payment experience as seamless as any domestic payment transaction. At the same time, we are solving for a myriad of additional problems faced by those sending money across borders. We are excited about the array of opportunities to invest efficiently to drive high growth, increase market share and deliver sustainable cash flow over the long-term. In order to deliver on these opportunities, we remain focused on our strategic priorities as you can see on Slide 4. These priorities allow us to execute our near term goals while setting us up to drive even more long-term returns in a large and growing addressable market where we only have approximately 2.5% share. We are positioned well today and expect to benefit from the ongoing rapid shift in customer preference to more digital options. Our strong second quarter results and improved outlook validate that our strategy is both the right one and delivering the outcomes we are looking for. These results also demonstrate the resilience of our customer base and the differentiated experience we are building for our customers to send money across borders seamlessly and delightfully. Now, let's get into some of the details of our second quarter results on Slide 5. We delivered $306 million in revenue, a 31% increase year-over-year and ahead of our expectations. We saw robust growth in quarterly active customers and strong customer engagement. We delivered $25 million in adjusted EBITDA, benefiting from strong…

Thank you, Matt. The strong results we delivered in the quarter are a testament to our customers' resilience and the consistent execution by our global teams. Our customer activity and growth remain highly durable and predictable, and we are pleased with our top-line results with improving operating efficiencies. I'll begin by reviewing some of the high level drivers of our financial performance and finish with more details on our improved outlook for 2024. With that, let's turn to our second quarter results. As a reminder, I will discuss non-GAAP operating expenses and adjusted EBITDA in my remarks. These metrics exclude items such as stock-based compensation, acquisition, integration, restructuring and other costs, and foreign exchange gain or loss. Reconciliations to GAAP results are included in the earnings release. Let's begin on Slide 10 with our high level financial performance in the second quarter. Our revenue and active customer growth were both above our expectations as we delivered solid execution and benefited from the seasonally consistent customer behavior in the second quarter that we described on our last call along with record new customer acquisition. Our adjusted EBITDA profitability also improved as we benefited from scale and a deliberate focus on driving efficiencies through all parts of the business. Quarterly active customers grew by 36% year-over-year to $6.9 million. Send volume grew 38% year-over-year to approximately $13.2 billion, resulting in revenue growth of 31% year-over-year to $306 million. Our GAAP net loss of $12.1 million narrowed in the second quarter, an improvement of 36% year-over-year as we benefited from leverage across the P&L. Our net loss included $37 million of stock compensation expense and we did not have restructuring charges in the quarter. Strong revenue growth combined with efficiency across operating expenses led to adjusted EBITDA of $25.1 million in the quarter…

Thanks so much, Hemanth. And with that we'll turn the call over to the operator to begin Q&A.

Thank you. And at this time we'll conduct a question-and-answer session. [Operator Instructions] Our first question comes from the line of Tien-Tsin Huang from JPMorgan. Your line is open.

Thanks a lot. Hemanth all the best to you as you move back to India here. I did want to start maybe if you don't mind just asking on the big growth in customers, which was nice to see. I'm curious if that growth, the big growth is related to the increase in fraud and why you're confident the increase in fraud is temporary?

Yes. Thanks Tien-Tsin for the wishes as well. No, it's not related actually. We're really pleased with the growth of our customers in Q2, some of that was the seasonality we talked about both on existing customers. We also had record new customers in the quarter. On the fraud point, very different, we saw it in certain corridors, it was very temporary in nature, something we saw towards the last – later part of the quarter and we were quickly able to fix it. So levels have been normalized and well within our thresholds at this point. So, unrelated largely to the record growth of our customers.

Great, good to know. And just my follow up and then I'll open it up. Just the – looking at the take rate, I know there's a lot of complexity to the take rate, but I'll ask it anyway. Just it was down sequentially and year-on-year. I think it's typically up second quarter over the first quarter. So why the change in pattern there?

Yes, thanks Tien-Tsin. So as we mentioned, and I appreciate your caveat in the question, we don't manage the business to take rate given that it's impacted by average transaction size, geo mix shift, continuous pricing optimization, pay-in/payout method mix. We – so take rate more – is more of an output in that respect. We manage more to revenue per transaction, profit per transaction, LTV. And when you look at it from that lens, its business is usual in Q2, no major shifts in competitive pricing. It wasn't due to any sort of pricing pressure. Ultimately, as we mentioned in the past, our business comes down to that trusted and reliable product. And part of that trust is providing a fairly priced product, but not the best. And if you look at some of the other metrics around the trusted product that we're delivering, the improvements on the CS front, some of the virtual AI assistant features that we've rolled out, I think there are further proof points that our product and some of the elements around the seamlessness and the trusted nature of it are what is actually driving the kind of growth from a revenue and retention standpoint. So, really pleased with the quarter.

Great. Thank you guys.

Thank you. One moment for our next question. Our next question comes from the line of Andrew Schmidt from Citi. Your line is open.

Hi, Matt. Hi, Hemanth. Thanks for taking my questions and Hemanth best of luck, pleasure to work with you. If I could dig into the EBITDA outlook in the back half, I know Hemanth you addressed this a little bit in terms of the EBITDA margin or EBITDA dollars being balanced in the third and the fourth quarter and creating some optionality for new customer adds in the back half. It just seems like we’re lapping some pretty significant upticks in marketing expense in the fourth quarter, which does leave you guys a good position: either a, drop some of that to the bottom line; or b, acquire a significant number of customers that will set you up pretty well for FY 2025. Maybe I know this all comes back to LTV to CAC and unit economics decisions. So maybe can you just walk us through the thought process there and how you’re setting things up at this point. Thanks a lot.

Yes, thanks, Andrew. And I think like we’ve had in prior years as well, I think, we wanted to make sure that as we look at sort of the back half, particularly in Q4, which is a seasonally high quarter, particularly to acquire new customers, we retain optionality in terms of being able to deploy our marketing to acquire customers. We look forward to 2025 and beyond. Again, we’re really focused on unit economics and the LTV CAC ratios, and we continue to do that. So, that’s some of the thinking that as we looked at sort of the EBITDA guide for the balance of the year, and particularly as you look at sort of the margin for Q4.

Got it. Understood. And then maybe just a larger related question, maybe you talk longer term in terms of your confidence to scale sales and marketing based on what you’ve been seeing in the market, the elasticity testing, word of mouth referrals stepping up and other things you have going on. Maybe just talk about how that confidence may have evolved over time, given what you’ve seen more recently. Thanks a lot.

Yes, thanks for the question, Andrew. I think that when you look at the scalability of our marketing, I think, that we’re feeling more confident than ever on that front, and we’re excited about the record number of new customers and the efficiency that we’re getting. And I think that’s a reflection of the fact that we have trusted brand. As you alluded to in your question, the word of mouth, continues to improve and our unit economics continue to be well below our twelve-month payback target. And so what that means to us is that we have a lot of optionality in terms of how much we spend to grow versus how much we let flow to the bottom line. And we’re well positioned from a marketing standpoint. And then more broadly to build on your first question that Hemanth also answered, our business is just getting a lot of scale and leverage, and it’s in a special place in that respect and that we grew 31% year-on-year from a revenue standpoint. But you look at our confident, adjusted EBITDA guide and the overall leverage we’re getting in everything from customer support costs to a variety of aspects of the P&L. And I think it’s a reminder that scale matters in payments businesses, both to deliver a differentiated and quality customer experience and to be able to continue to get leverage and profitability as a business.

Totally agree. Thank you very much, Matt. I appreciate the comments.

Thanks, Andrew.

Thank you. One moment for our next question. Our next question will come from Ramsey El-Assal from Goldman – from Barclays. Your line is open.

Hi, this is Allison on for Ramsey. So, thank you guys so much for taking our question. And Hemanth, it’s been great working with you. So, just thinking through the ongoing momentum you’re seeing in new adds, Matt, I want to go back to this seafarer product that you spoke about, which does seem like a nice opportunity to capture new customers. So, how big of a lift is it to get these types of specialized products off the ground from an investment standpoint? And how easy is it to replicate this type of product to other groups? So, is that something that we could see in the product pipeline going forward? Thanks.

Thanks, Alison [ph]. Yes, great question and great to hear from you. We’re excited about the seafarers’ product, and I think it’s indicative. We’ve talked about some of the technology investments we’ve made in our platform, but those technology investments have enabled us to more nimbly and efficiently adjust our product to be able to serve multiple audiences. Seafarers is a prime example of that. We also talked about high dollar senders, but you could apply that to a wide range of different types of customer profiles and different geographies. I think that we’re getting faster and better at doing that, and the result is continued growth in the numbers that you’ve seen from a volume and revenue standpoint. And so I’d say with seafarers, as I mentioned, I had an opportunity to interact with seafarers last quarter, and it’s an underserved demographic, that I think, our product is serving very well. And there’s 1.89 million seafarers that work across the globe. It’s one of many segments that you can expect us to continue to grow in and serve even better.

Great. Really helpful, thanks.

One moment for our next question. Our next question will come from the line of Will Nance from Goldman Sachs. Your line is open.

Hey, guys. I appreciate you taking the question tonight. Matt, I actually also wanted to follow-up with some of the comments you made on customer acquisition. So the seafarer example, I think, you also mentioned higher dollar senders and the fact that the majority of your customers are kind of reoccurring senders each week or month. And so I’m just wondering maybe high level, if you can hit on if there has been any noticeable or meaningful shifts in sort of the profile of the incremental customer. I think there has been a lot of focus on the third-party data around app downloads, and it seems like – it seems like the momentum in the business is continuing very strong. So I’m just wondering if there has been any shifts in sort of the profile of the existing customer over the last couple of quarters. Thanks.

Thanks, Will. Yes, great question. I would say that the mix in terms of the profiles of customers has not changed substantially in the last quarter or last even year or two. I think that what I like about the business in terms of where it’s at now is the portfolio of kind of different geographies, which we’ve proven we can deliver different segments of customers. And so I view this as additional – additions to a very diverse portfolio of customers. And having started the business 13 or 14 years ago, I will tell you that kind of business is much more resilient, much more predictable than when we were just in U.S. and Philippines, call it, which we were in for the first two years of the business alone. You look at the business now, and that diversification, which is only becoming more diversified, gives even more, as I mentioned, predictability to the business. And I would view it as continuation on that journey. When you look at the absolute number of customers from these new segments, as opposed to a rapid change in any way, shape or form.

Got it. Appreciate that. And then I – given that Hemanth in the announcement, I wanted to lob the CFO question as well, just on the fraud, the fraud cost this quarter, it looks like I was looking at the queue. It looked like the fraud losses maybe are $5 million, $6 million sequentially. Is that about the right number to think about kind of the impact in the quarter and just confirming, you kind of expect to be back at normal patterns in the back half. Appreciate it. And Hemanth it has been great working with you over the last few years.

Thanks, Will.

Thank you. Go ahead.

No, sounds great. Let’s go to the next question.

One moment for our next question. Our next question will come from the line of David Scharf from Citizens JMP. Your line is open.

Hi, good afternoon. Thanks for taking my questions. Maybe just to follow-up on a couple topics that have been touched upon. First, just on the fraud. Just curious you had talked in your prepared remarks, Matt, on implementing risk-based – more risk-based underwriting, if you will, for larger dollar senders. Was the temporary bump in fraud related to large dollar senders? Anything that was either very geographic focused or dollar size, something that is very easy to identify and gives you comfort for it being ephemeral?

Yes. Yes, thanks for the question. It was not related to higher dollar senders, to answer that directly. And I think that the important element when you think about the fraud systems that we have, is there is a constant balance between optimizing for fraud loss rates and for maintaining a great user experience and not having what we call higher sideline rates, meaning manual reviews for good customers. And I think that, as we’ve said in the past, there will be times where we have more sophisticated fraud attacks. And I think we’ve shown in Q2 and over the longer journey that we’re good at responding to those. And if anything, we’ve just gotten better because of a lot of the data and analytics that we can feed into our machine learning models that can help do that delineation. And so that’s what happened in Q2, is there was an uptick as we continue to have that optimization across that efficient frontier of sideline rate and fraud loss, we pulled it back into our levels that are going into Q3, back within our range of goals and normality, while again maintaining low sideline rates. So, excited about what’s to come. And you should expect in the business, some variation, but it’s always very temporary. And we bring that back under control, as we did in Q2.

Got it. Understood. And maybe following up on the EBITDA guidance, and maybe approaching it from a different angle, at least on a revenue basis, Remitly is actually one third as big as Western Union is now. Based on your full year guidance, when we look at their total revenue ex-U.S. to U.S. transfers. And I’m just wondering, you’ve clearly shown an ability to scale already. There have been quarters where you’ve delivered outsized margins. And as we just think about the trajectory of where margins could head, whether it’s next year or three years out, do you feel normal ceiling in terms of the size and the market share you can achieve, or certain milestones at which you say, you know what, now is the time to focus less on customer acquisition and more on profitability, because it’s been quite remarkable how quickly the company has grown. And Western Union obviously is really not grown in 20 years. Not that it might be an artificial ceiling to how big a global remittance provider could get that $4 billion in revenue mark. But just curious about how you think about what is the milestone out there, whether it’s account growth, corridor numbers or revenue, in which kind of signifies to you that there’s more of a focus on margin expansion versus account acquisition.

Yes. Thanks, David. I think that the answer is if you look at our current business, we’re really proud. We’re at $1.2 billion in revenue, trailing 12 months, and we’re continuing to show that leverage in the business. And so we do have ambitions, and we talk about this internally, to become the largest remittance company on the planet. And we are – you see the glide path to be able to do that, but we can do that while continuing to show leverage on the bottom line. And I did a fireside chat with Tien-Tsin at a JPMorgan conference recently where I kind of went through different aspects of the P&L and talked through where there is leverage as a technology company doing remittances. And what you see is whether that’s in this quarter, leverage on the customer support side, where we continue to see that to leverage on the marketing element because of the word of mouth components, to leverage on overall headcount as we just get more scale as a payments company, you see a business that continues to be able to deliver really remarkable top line growth for our scale and size, while showing leverage on the bottom line. And we’re excited to continue to deliver that.

Got it. Thanks very much.

Thank you. One moment for our next question. Our next question comes line of Darrin Peller from Wolfe Research. Your line is open.

Hey, guys, thanks. Sorry, my phone. First of all, Hemanth, just wanted to wish you congrats as well. But I guess just on the overarching growth in the customer adds, Matt, if you could just take a step back and review the strategy, what’s changed in it, if anything, in the last, let’s call it few quarters to deliver the kind of growth you’re seeing still being sustainable? And maybe just give a little more color on the corridor plans. Again, you’re at about, I think, 5000 is what I saw lately. But like, when you compare to what it could be, is there any intentional shift around different corridors or any push into new markets that we should expect in the next, let’s call it 12 months? And just a quick follow-up, let’s put it all together, is on pricing. So if there’s any discussion you could share with us around trends you’re seeing in the market, there has been different yield. I know fraud in some cases here was a little bit more of an impact. But in some of the competitors we’ve been seeing some spread widening between growth on revenue and transactions. So, any color on what you’re seeing competitively would be great. Thanks guys.

Yes. Yes, thanks, Darrin. I think there were kind of three parts to your question, so I’ll answer them each briefly. On the net adds point. It was what we said to some extent in Q1 in that there is some seasonality when you look at quarterly active users. And so we know that the market looks at that and refers that metric of Q1 to Q2, change in quarterly active users. And I think it was exactly as expected in that there is more holidays and reasons that folks send in Q2 combined with a – with record number of new customers and continued, strong retention that we’re really proud of given our exceptional product. And so in some respects, it was business as usual on that front. On the corridor side, we’re in about 5000 corridors now. Over time, in the long run, we plan to expand that to 15,000 to 20,000 globally. But the reality is we have so much room to grow in the 5000 corridors we’re in. So you should expect us to continue to add corridors in a methodological way, as we’ve always done. But the takeaway there is lots of room to grow since you said 12 months. Lots of room to grow in the next 12 months in our existing stores. And on the pricing front, no material changes in Q2 on pricing. We, as always, are continuing to do price optimization so that we provide a fair value to customers as well as more importantly, improve our product. So it’s trusted and reliable, which is the foundation for what customers look at when they choose a remittance provider.

Okay, that’s helpful. Thanks, Hemanth.

Thanks, Darrin.

Thank you. One moment for our next question. Our next question will come of Cris Kennedy from William Blair. Your line is open.

Great. Thanks for taking the question. And Hemanth, good working with you. We’ve seen some smaller peers have some struggles and shut down. Can you just talk about the structural cost advantages that Remitly has relative to others in the industry?

Yes, absolutely. And I can answer that as a Founder, having been subscale. I think it’s really hard to succeed in this business without scale. And by succeed I mean deliver an exceptional customer experience while continuing to get leverage and profitability as a company. And so it’s not a surprise to see some subscale players, whether those are subscale digital players or subscale cash-based players. And I think we’re the beneficiary of – and ultimately our customers, the beneficiary of being able to have enough scale to deliver a lot of the things that we’ve talked about, whether that’s some of the data and analytics on our fraud side, our virtual AI assistant, and the scale required to deliver that exceptionally, our pay-in, pay-out partners, our word of mouth, I could go on and on, but scale is important. And I think that folks that are subscale are having challenges and folks that are especially digital first at scale are delivering the kind of growth and retention numbers that you’re seeing from us in Q2.

Thank you for that. And then last quarter, I think, you talked about Africa as being a large opportunity for you. Can you just talk about some of the dynamics of that market? Thank you.

Yes, sure. Big opportunity simply because we haven’t been there as long if you look at just the 13-year history of the company. And it’s a good example of where, when I say we’re, we have a lot of room to grow in the 5000 corridors we’re in, lots of room to grow across Africa. And obviously within Africa there is East Africa markets like Kenya, where the origin story came from and I lived before starting the business. There is a lot of countries in West Africa. But the punchline there is rapid shift towards digitization both on the origination and the disbursement side, especially in disbursement options like mobile wallets. And we feel really well positioned to offer a great product in several countries in Africa to be able to drive growth.

Okay, thank you.

Thank you. One moment for our next question. Our next question will come from the line of Alex Markgraff from KeyBanc Capital Markets. Your line is open.

Hey guys, thanks for taking my questions. Matt, one for you and then one for Hemanth. Just on the virtual assistant that you mentioned for customer support. Any way to sort of characterize how big of an unlock the language expansion is, just maybe in the context of like what mix of interactions or engagements on the support side are not in English and then just how big of an effort it is to broaden the language coverage for that?

Yes, great question. I do think that in general, when you look at a lot of the AI tools, the language translation capabilities are material. And so I think there’s opportunities there. I think most of where we’ve driven it thus far is in English, but easy expansion when it comes to multiple languages. And if you look at the number of use cases, we can also expand the number of use cases for the types of problems we can solve when customers are using that virtual AI assistant. So excited about the potential there for both better customer experience as well as helping our customer support agents do things that they can uniquely do with their skills, but at a more specialized level.

Okay, thanks. And then Hemanth, just on – I apologize if this was hit already, but just on the transaction margin, expansion for the year and consideration of the higher expense rate in 2Q, how should we be thinking about that level of expansion in the second half and for the full year?

Yes. Yes, thanks for the question, Alex. No, I think we would continue to focus on improving – transaction – reducing transaction expenses over time. I think we’ve – I think the rate of improvement will be more moderated. We had some really significant improvements last year, particularly in the second half. So, we’re going to be comping through some of that. But in terms of what we’re doing with the focus on whether direct integrations, reducing our – improving our customer experience and so many different levers, especially as you’ve gotten a lot of scale and volume growth, we do continue to see opportunities to reduce transaction expenses over the next coming years.

Thank you. Pleasure working with you Hemanth.

Thanks.

Thank you. One moment for our next question. Our next question comes line of Andrew Bauch from Wells Fargo. Your line is open.

Hey, thanks for taking the question. And Hemanth, wishing you the best. It’s been a pleasure. Looking at volume per customer. It’s inflected positively in the second quarter for, I think, the first time in about two years. I’m sure the holidays had something to do with that. Is there any way to kind of parse out what those holidays could have contributed to that metric? Just trying to get a sense if we could potentially start modeling that flat to positive going forward.

Yes. Yes, thanks for the question, Andrew. No, I think as we called out last quarter, we do see when we go from Q1 to Q2 that there is a significant increase in sort of the sequential growth of active customers. And I think – and we saw that as it sort of played out, I think we did see a degree of outperformance, particularly given some of the product improvements that we’ve been making. And those enhancements have contributed as well to just improving retention and engagement with customers. And I think the other piece here is, as you’ve called out before, transaction intensity continues to improve as there is more and more digital mix and the disbursement options. And we have an advantage there as well in terms of our product offerings. So I think those are some of the factors that show that have demonstrated increased sort of customer engagement in the quarter on top of a seasonal pattern that we expected.

And then maybe just to follow-on top of that with a macro kind of related question. Anything that you guys are seeing in the market today, be it from geopolitical, economic or otherwise, that you are monitoring, that helps inform the guide that you’re putting out today. I know remittances are generally pretty stable from a macro perspective, but just want to make sure we’re covering our bases.

Yes, I can take that one. I think that we certainly monitor the geopolitical landscape not only domestically, but globally now that we’re in 100%. And the first thing I’d say is, having been around for prior election cycles and for, over a decade, we have seen various cycles unfold. And the criticality of remittances and the predictability is something that has been there through a variety of, whether it’s geopolitical or economic cycles. So I’d say we are taking those into account and we feel even with those, that we have high confidence in our guide.

So no developments to speak off?

No developments to speak of, no.

Great, thanks.

Thank you. One moment for our next question. Our next question comes from the line of Rufus Hone from BMO. Your line is open.

Hey, guys. Thanks for the question. I wanted to ask about the G&A trajectory and you saw a meaningful step down in the G&A percentage sequentially this quarter. Sounds like you’re being measured around hiring, but also may be looking to increase the mix of cash comp here. So love any color you’d like to share on the G&A outlook. Thanks.

Yes, thanks Rufus. Yes, I think it’s G&A and across the P&L, we’ve been really focused on operational efficiencies. You’ve seen that on the customer service side and we’re seeing that now across other aspects of the operating expenditures. So G&A would follow a similar trend. We would expect that the growth rates that would be moderated going forward. And we see technology, we see process efficiencies, the way we’re managing our software spend. There is so many dimensions to this, and we have continued to put focus on it to drive efficiencies in G&A.

Okay. And then just a quick follow-up on Remitly Circle and other new products that you’re working on. I was wondering if there was any update on progress and the level of spend associated with that as well. Thanks.

Yes, thanks. If you look at our broader vision of transform lives with trusted financial services that transcend borders, we are highly confident in the broad range of pain points that our customers have, starting with remittances and international payments, but extending to other areas, including some of the areas that circle is solving. And if you look at the early trajectory there, I think, it’s encouraging and we’re excited. But it’s in the broader context of this technology platform that we’ve built out that enables us to innovate and launch new products in a more modular fashion based on APIs and other elements that we have started to improve in our technology stack. And so I’d say that that also ties to the cost point. I think it costs us less to launch and ramp new products. We’re investing in a pretty disciplined way in that area, but excited about what’s to come. And it’s critical for us to continue to scale that. And we look talk – we look forward to talking about it more as it does reach an efficient scale and make sense to talk about in more detail.

Thank you. One moment for our next question. Our next question will come from the line of Gustavo Gala from Monness, Crespi, Hardt & Company. Your line is open.

Hi, Matt. Hi Hemanth. Best wishes Hemanth by the way. Can we talk about transaction expense mechanics a little bit differently? Can you help us think of how this scales, how do volume – as the volume gets bigger, is there a reset in the pricing? How often does that happen? Just how to think about that? And then the other one, the mix of customers you’re bringing on, can you talk about what you’re seeing in initial spend, maybe in terms of intensity and AOV or transaction size for those non-India, Mexico, Philippines customers? Thanks.

Yes, I think you called out that. Thanks for that. I think you called out one of the key levers as we’ve gotten more volume and we negotiate with our pay and disbursement partners, there’s certainly some volume tiers. These will happen over time. We have been negotiating some very large contracts. I think we called out in the last couple of quarters some of the partnership with the larger global payment providers, and that’s been an ongoing thing. So we’ll see this span out as we get more and more volume and scale. And that’s one of the bigger levers in being able to get volume related economics. So that’ll flow through. And your second question in terms of mix, I think, what we’re seeing is broadly the mix of customers haven’t really changed. What we’re seeing is that largely have a very similar behavior and patterns of resiliency that we’ve experienced now for many, many quarters and years. So that fundamentally hasn’t really changed. And I think that will probably stay the same, at least here, as we look forward, certainly as part of our guidance, and then as we think about the coming years.

Thank you.

Thank you. One moment for our next question. Our next question comes from Matthew ONeill from FT Partners. Your line is open.

Yes, thanks for squeezing me in at the end here. Appreciate it. And Hemanth, congratulations and best wishes. I thought I would just ask a couple of follow ups. A lot of good questions asked and answered. When Western Union provided their prepared remarks on their earnings call, they talked about how they viewed the higher interest rate environment as forcing out some rational competition in the market and driving out some marginal players. I was just curious, broadly, what has your experience been the last few months on the competitive front? Would you sort of share some of those views or anything else that you’ve seen? And then if I could just do my follow-up quickly, I was just curious on the heightened fraud, just to confirm, it sounds like you guys have gotten your arms around it and already it’s come back down. And was it a particular geography or a new type of vector that kind of popped up or any color you could provide there? Thanks so much.

Yes, great question. On the second one, Matt, yes to having optimized the fraud and it’s back within our typical ranges. And it was in a few geographies that we focused on and brought it down. On the former, when it comes to the smaller players and just cost of capital, I think, that there is definitely some truth to that in the sense that they, if you look back to even the Remitly journey, I think, it does impact the ability for subscale players to be able to get to scale, because it’s harder to raise capital. I also think there is benefits from the standpoint of marketing efficiency, given that there’s not as many irrational crypto and other advertisers that might make the marketing environment more competitive. So I think we’re a beneficiary of that. I think that you look at just how well positioned we are as a digital player at scale, and we’re really excited about that and I think it does make it. So there is probably going to be additional consolidation in the market around players that have scale. And the only thing I would add is that digital players at scale, I think, have a competitive advantage. And where we sit, we feel right in that sweet spot.

Thanks so much. Appreciate it.

Thanks, Matt.

Thank you. That’s all the time we have for Q&A today. I want to turn the call back over to Matt Oppenheimer for any closing remarks.

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